John Won a Lottery That Will Pay Him $250,000 at the End

question 18

Multiple Choice

John won a lottery that will pay him $250,000 at the end of each of the next twenty years. Zebra Finance has offered to purchase the payment stream for $3,397,500. What interest rate (to the nearest percent) was used to determine the amount of the payment?

• A) 7%.
• B) 6%.
• C) 5%.
• D) 4%.

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Definitions:

Boolean Operators

Terms such as AND, OR, and NOT that allow one to fine-tune a database search.

Logarithmic

Related to a scale or mathematical function that grows in proportion to the logarithm of a variable.

Bodleian

Referring to the Bodleian Library, a famous historical library associated with the University of Oxford.

Numeric

Related to, consisting of, or expressed in numbers or digits, often used in the context of data or information that can be quantified.